Relationships between asset owners and their managers are being reassessed following the departure of NZAM
In the world of asset management, the Net Zero Asset Managers (NZAM) initiative is currently undergoing a strategic review, following the departure of major players such as BlackRock. This shift comes amidst growing concerns about the alliance's effectiveness and its translation into tangible action on climate.
Samantha Chew, stewardship lead at Aegon, argues that BlackRock, despite leaving the NZAM, has made significant progress on climate, based on Aegon's stewardship approach. Aegon is pleased with BlackRock's recent release of new decarbonisation guidelines, as it now has Paris-focused stewardship by BlackRock on Aegon's default fund commitments.
Diandra Soobiah, director of Responsible Investment for the £48bn master trust Nest, emphasizes the importance of managing climate change risk and its impacts on investments and the broader financial markets. However, some asset owners are questioning whether it's time for the NZAM to review its priorities due to concerns about the alliance not always translating into action on climate.
The suspension of the NZAM's activities follows a trend of asset managers like BlackRock, Vanguard, Northern Trust, and others exiting the initiative. This departure has led to a muted response from asset owners, with few making public statements about their relationships with the departing asset managers.
Some asset owners are re-evaluating their manager relationships going forward. Fredric Nystrom, head of sustainability and governance at Swedish pension fund AP3, stated that AP3 is in regular dialogue with their service providers and will consider BlackRock's departure as one factor in future reviews of their relationships.
Despite the challenges and complexities reported, the Net Zero Asset Managers initiative remains active. Key participants like Border to Coast continue to pursue net-zero commitments and climate-related investment strategies. This persistence is supported by the launch of the Science Based Targets initiative (SBTi)'s Financial Institutions Net-Zero Standard, which strengthens the framework for credible climate action in asset management.
However, challenges remain in practical implementation and transparency. Border to Coast’s decision not to disclose detailed climate scenario analysis results due to model limitations reflects the complexity of forecasting climate risks and transition pathways. Nonetheless, active engagement and stewardship remain core strategies for driving portfolio alignment within the initiative.
In summary, although the Net Zero Asset Managers initiative has seen some departures and paused certain activities, it continues to engage members committed to net-zero goals, supported by the launch of the SBTi's Financial Institutions Net-Zero Standard, which strengthens the framework for credible climate action in asset management.
Read also:
- Equinor's funding cut off by Sarasin & Partners due to climate change apprehensions
- Stadion Dynama Posed as Perilous for Visitors, Chyzh Prepared to Infuse $30 Million for Renovation
- Destroying Bingin Beach in Bali overlooks the substantial danger posed by excessive development
- Honda CR-V's Air Conditioning System Facing a Common 2022 Model Issue, Dealer Replaces it and Offers a Decade-Long Warranty for the Fix
